Let's say good morning too. The host of How to Money Sunday's noon to two on KFI, it's Joel lars Guard. Joel. I just mentioned that federal employees could be losing their jobs, and with a lot of federal layoffs kind of looming, and of course there's always private laoff. Starbucks just announced they're cutting like fifteen percent of their corporate workforce. We need to talk about how to get ready for a potential layoff.
Yes, yes, we do. And yet that is that's been one of those one of those things that's always true, is that every individual you could be laid off, especially like if you're working for the man, right if you don't run your own business, like you work at the pleasure of the business that you work for. And we're seeing this in particular with like what DOGE is doing with the federal government. This I'm really sad about what's happening for a lot of individuals who are on the
federal payroll and DOGE seems to be cutting indiscriminately. And even people I think who who think that there's room to cut ending in the government, they might not love the way though is going about this. But where I'm sitting.
I think it's really important to highlight how you need to be prepared for a layoff, whether you're a federal worker or not, because, yeah, if you're working at Starbucks Corporator, wherever you're working, there's always a chance, right that the that there's an economic downturn of the experience, or even if there's a personal downturn in your life, or there's an industry downturn in that you know, in your particular section of the workforce, and it's important to be prepared
that you might not have your job, you know, weeks or months from now. And that's why for me, like the biggest piece of advice I can offer to people is to increase your savings rate and to try to get up to having that three to six months worth of living expenses in a bank account that is ultimately your essentially short term insurance against some sort of potential layoff that might be coming down the pike.
Okay, three to six months, and you want that sitting in a savings account, not in a place where you can't get to it.
Right or got Yeah, it's got to be liquid, it's got to be accessible. If you're sticking I literally had a question from a listener recently. She's crushing it on the investing side, maxing out like a four toroh one k, which is a ton of money to be investing every month. But then on the flip side, she's like, I don't have any money in savings, and I don't want that
to be the case you. I love the idea of investing for your future, obviously, but I don't want you to do it at the complete expense of having liquid funds accessible. And so what that means for most people is to have like at least twenty five hundred bucks
in savings. That's the initial amount I want you to secure because that's going to get you through most bumps in the road, and then you can start taking advantage of let's say, like the match in your four O on K, while you're also building up that emergency fund to be a bigger amount. But ultimately that emergency fund, yeah, is going to be a big help if you do lose your job. It's going to provide you the ability to keep the roof over your head and to keep
food on the table. And something else I talk about pretty frequently is something called a bare bones budget, and I want people to institute one of those as well. We've got an article about it on howto money dot com if people want to know all the details. But essentially it's like, hey, how much can I cut if the stuff were to hit the fan?
Right?
Like, if I did lose my job, how much could I cut back on my monthly spending. I'm not asking people to go bear bones budget while they've still got money flowing in, but it's a good idea to at least be prepared for that and to say, listen, I've thought through this. If I were to lose my job, I can cut back my monthly spending from forty eight hundred dollars a month down to thirty three hundred dollars a month, and that would give my emergency fund an extra month and a half or two months to me
to keep me solvent. So I think that barbones budget is another thing, and I love for people to actually create it before something like a job loss occurs, that you kind of have that confidence if it does.
Come about, Yeah, so create it now and then set it aside for in case you need it so you don't have to expect. We don't have to do it now. So I can keep my Burke Williams membership for another couple of months at least.
Right, But it's nice to know, oh, hey, if I lose my that's that's gone, right, Or the eating out is gone for the time being, or some of these subscriptions that they're gone. Like you can't necessarily get rid of a car payment overnight, right, but that's something you can you can kind of have your eyes looking forward to that. But there are other things that you can
cut immediately. And yeah, it's stinks you're going to miss that thing, but the whole goal is to make sure that you have enough money for the things that are that are crucial.
Yeah, such great advice from our buddy Joel Larsgard, who you can listen to every Sunday on how to Money noon to two right here on KFI. You can also follow Joel at how to Money Joel and I want to check out your bare bones budget at howtomoney dot com. Thank you, Joel.
Thanks Amy,